All posts in category Alternative Energy

Here’s a stumper: Why are shares in the global leader in the most mature renewable-energy technology so moribund?

Denmark’s Vestas Wind Systems, the biggest maker of wind turbines in the world, can’t get any love from investors. Its share price, after an up-and-down 2009, is roughly where it was at the start of last year.

Some analysts think that’s out of whack. HSBC today put a “buy” on Vestas shares and reiterated a target price of 500 Danish kroner; the stock today trades at around 333, well off the highs it reached last spring and summer. Jeffries Research also put out a “buy” recommendation today, though with a slightly lower target price.

Geothermal is boiling hot these days. Wind and solar might even want to watch out.

The industry is adding 144 geothermal power plants in 14 states, says Karl Gawell, executive director of the Geothermal Energy Association. That’s up from 121 projects on the books last March and a 73% increase from the 83 projects underway two years ago.

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“We’ve added 200 megawatts in the last year,” said Mr. Gawell, during a stop at The Wall Street Journal’s New York office on Wednesday ahead of the industry’s big finance forum today. “Compared to wind, it’s not much. But it is a lot for a small industry with only 3,000 installed megawatts.”

One big shot in the arm: The federal stimulus, which is chanelling $400 million to the geothermal industry in the form of tax incentives and cash grants. The trade group has seen member ship swell to about 150 from just 30 members five years ago.

Another big key: Technology. Geothermal companies are developing new technologies that allow lower-temperature water in the earth’s core to be turned into geothermal energy. That makes development possible in more place, putting states such as Texas, Mississippi, and Louisiana on the map in addition to traditional geothermal heartlands such as California.

Geothermal’s potential, thanks to advanced technologies, could be huge. The U.S. Geological Survey notes…

Is the climate part of energy-and-climate legislation about to get thrown under the bus?

As Congress gets back to work, one of the big questions looming on the Hill is whether it’s time to park plans for a national curb on greenhouse-gas emissions and focus on a narrower energy bill. The rationale? Energy reform, even to boost clean energy, enjoys some cross-aisle support. Capping greenhouse-gas emissions has proven a tough slog even within the majority Democrats. And the health-care fight has undoubtedly dented enthusiasm for another bruising battle.

There’s plenty of chatter out there to that effect. Iowa Sen. Chuck Grassley said yesterday that “I think you can expect everything but cap-and-trade,” referring to upcoming Senate work on energy legislation. Politico details the back-and-forth.

Sen. John Kerry, co-author of two of the four cap-and-trade bills bouncing about, is horrified by the prospect. He told E&E News:

“If you separate climate from energy reform, you slow your ability to create those clean jobs because every market expert tells you those energy reforms can’t take hold unless you price carbon. Unless you do something comprehensive you’re just going a more expensive, less effective route and you’ll keep trailing other countries.”

The idea that America’s clean-energy push has become, first and foremost, a jobs push is now indisputable. The White House announcement Friday of an additional $2.3 billion in clean-energy manufacturing tax credits was specifically touted as a vehicle for jobs creation first and a way to reduce greenhouse-gas emissions, second.

Associated Press

The link between jobs and energy has been with Team Obama since the presidential campaign; and given the recession and 10% unemployment, it’s probably the only way to advance environmental legislation at all, as Jeff Ball notes today in The Wall Street Journal.

That doesn’t mean there’s not plenty to be wary about in the latest White House announcement.

For starters, the $2.3 billion is expected to help create about 17,000 jobs. That works out to roughly $135,000 per job—and remember, a “job” is defined as one year of employment. (To be fair, private-sector clean-energy job-creation may not be a lot cheaper. The White House estimates the new tax credits will spur an additional $5.4 billion in private investment, creating 41,000 jobs at a cost of $131,000 a head.)

Natural gas is often seen as the “bridge fuel” to a clean-energy future—it’s abundant, reliable, and has about half the emissions of coal. Today, a couple of reminders of just how tricky it can be to really make that gas-powered energy revolution a reality.

In California, state regulators are concerned that new emissions rules from the Environmental Protection Agency could actually “retard” the state’s efforts to clean up its energy mix, The Wall Street Journal reports today.

How’s that? California plans a massive increase in the use of renewable energy, such as wind and solar power—but needs new natural-gas fired power plants as backup. New EPA rules on greenhouse-gas emissions from big emitters—power plants and the like—will now require permits for gas-fired plants. That could actually set back California’s green dreams, the paper reports…

Uncle Sam has always been much kinder to corn ethanol than its poorer cousins, sugar-based ethanol and biodiesel. But these days, the doted-on child of biofuels seems to be getting all the breaks.

The corn ethanol industry, while still wounded, is enjoying profit margins not seen since 2006. The $4.17-a-bushel price of corn, ethanol’s main feedstock and biggest cost, remains far below its 2008 highs of nearly $8. Government subsidies are intact. There are fewer players – after several high profile bankruptcies – competing to produce government-mandated quantities to blend into the fuel supply. Higher crude-oil prices also translate into a higher selling price for ethanol, since it is a gasoline substitute. Valero Energy Corp. turned a small profit from its corn ethanol business in the third quarter.

By contrast, rainy weather has decimated sugar crops in Brazil and helped sugar prices more than double to about 28 cents a pound, a 29 year high, from 12 cents a year ago…

A boom in Chinese wind investments helped Asia top the Americas in clean energy spending last year, but Europe-Africa-Middle East remained the top region, according to data out this morning from consultant New Energy Finance.

Overall, considering that 2009 was the depth of the Great Recession and credit markets were chilly, clean energy investments continued to do well. Total new investments were $145 billion, down only 6.5% from all-time high of $155 billion in 2008. Increases in government spending and small-scale (think rooftop solar) projects rose, while spending by venture capitalist and private equity firms plunged….

Earlier this week, Codexis Inc. filed for a $100 million initial public offering on Nasdaq. The short press release is here and we’ve uploaded the entire 841-page file for your reading pleasure here.

Codexis, as you may recall, is a San Francisco-based company developing the microbes to chew up plants and turn them into sugars, which are then turned into ethanol and diesel. Shell owns a 20% stake in the company and is pumping about $15 million a quarter into research and development. It filed for an IPO before, but then pulled back in September 2008 citing “current public market conditions.”

That was good timing. Two weeks later, Lehman Brothers filed for bankruptcy. Within three weeks, American International Group was bailed out and Bank of America had bought Merrill Lynch.

An alternative energy, U.S.-listed IPO is something of a novelty. The last biofuels IPO was …

Don’t laugh—the idea has some currency in Canada. Homer’s bumbling nature—you’ve seen him at work inside the Springfield nuclear power plant—simply reinforces public worries about the safety of nuclear power. Mr. Burns doesn’t much help the industry’s image. Three-eyed fish don’t help, either. And Lisa Simpson’s eco-activism is the icing on the cake.

That’s from philosophy professor Bill Irwin, who’s been making the rounds on Canadian radio in the wake of the decision by the province of Saskatchewan to nix plans for a new nuclear reactor. Dr. Irwin wrote “The Simpsons and Philosophy: The D’oh! of Homer,” one of his several books on the confluence of TV and philosophy. (Wait for Tony Soprano on cap-and-trade.)

The idea that the Simpsons could influence public attitudes toward nuclear energy isn’t so far-fetched: As much as we harp on mundane issues such as economics, lead times, supply chains, and the waste issue, it’s entirely possible that Homer has a bigger audience than MIT reports…

We may never see plug-in airplanes, but the airline industry is one step closer to breaking free from the bonds of petroleum. Fifteen major airlines and air cargo companies just announced that they’re in negotiations to buy billions of gallons of alternative fuels – made from vegetable oil, coal, and petroleum coke.

Some of it is the rebirth of an old tradition: aircraft have been burning coal-based alternatives to petroleum for nearly a century, but mainly under duress, such as when the international community placed an embargo on South Africa’s apartheid regime in the 1980s. Now a group of 13 airlines – including big names like American Airlines, Delta and Lufthansa – signed a deal with Rentech Inc. to get jet fuel made from coal and petroleum coke at a proposed plant in Mississippi. The company says that its fuel has a smaller carbon footprint than petroleum, because the CO2 excreted in its production will end up injected in a Gulf Coast oil reservoir.

But there’s room for veggies too. Many of the same airlines – and two others, Alaska Airlines and Hawaiian Airlines – are also in talks with Seattle-based start-up Altair Fuels to buy up to 750 million gallons of jet fuel and diesel made of camelina – a little oily seed also known as gold-of-pleasure.

AltAir proposes building a 75 million gallon per year facility at Tesoro’s Anacortes, Washington refinery – which would quench 10% of the SeaTac airport’s thirst for fuel. Tesoro, one of the largest refiners in the U.S., is a partner…

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Environmental Capital provides daily news and analysis of the shifting energy and environmental landscape. The Wall Street Journal’s Keith Johnson is the lead writer. Environmental Capital is led by Journal energy reporter Russell Gold, and includes contributions from other writers at the Journal, WSJ.com, and Dow Jones Newswires. Write us at environmentalcapital@wsj.com.